In the recent
years, we have seen a transformation in consumer behavior. The use of social
media allows consumers to exchange thoughts; the migration from controlled
media and monitored media. Easy information access combined with more educated
consumers is making promotion planning more important. Finally, the chase for
"value" is not only changing the timing of purchases but also
location and brand. All these changes on the demand side are forcing consumer
products companies to think about supply side in terms of: Demand Driven Supply
Networks.

The supply chains are
being transformed into complex supply networks with the introduction of
co-packers, co-manufacturers and service providers. Commodity price increases
and fluctuations are adding to volatility and margin pressures. Overall,
changing consumer behavior, and increases in complexity, globalization and cost
reduction pressures all force consumer products supply chains to fulfill the
three A's: Adaptability, Agility and Alignment.

The crux of these
strategies relies upon the application of Business Analytics to help close the
gap between planning and execution. In this case, Closed-Loop Dynamic Inventory
Optimization is leveraged to set appropriate inventory targets throughout the
global supply chain and ensure that the right products are positioned in front
of the right customers at the right time.

Closed-Loop Dynamic
Inventory Optimization is a core process that regularly tunes policies across
the supply chain to keep inventory closely aligned with changing conditions.
But, the organizational value of such an approach goes beyond the more obvious
metrics of improving service levels, order lead times, and inventory
positioning. For example:

Higher performing supply
chains can incur lower selling costs

Better replenishment enables
faster collection of receivables

Utilization of optimal
inventory targets results in less cash tied up in inventory

The
application of Business Analytics on top of traditional supply chain planning
and execution solutions gives CP Manufacturers the unprecedented ability to
continuously improve operational efficiency, reduce costs, and enhance the
customer experience.